'OMG!': Emails reveal shock as the Massachusetts Gaming Commission reacted to Steve Wynn allegations
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On the afternoon of Jan. 26, when a copy of the Wall Street Journal's explosive report on sexual misconduct allegations against casino mogul Steve Wynn landed in Massachusetts Gaming Commission chairman Steve Crosby's email inbox, his reaction consisted of three letters.
"OMG!" Crosby wrote in an email to his wife, after the Gaming Commission's director of communications forwarded the story to the commission's top brass.
Crosby, his fellow commissioners and their staff would swiftly be swamped with media inquiries and outraged comments from members of the public, as the regulatory body attempted to respond to the growing crisis.
In another email, Crosby described the allegations as a "stink bomb" that had hit the commission.
While the $2.4 billion Wynn Boston Harbor casino had faced legal challenges before, the commission quickly realized that the fallout from the Journal's story would be of another magnitude entirely.
"These fires burn so hot they can consume anything they touch," Crosby said in responding to another email about the allegations. "Hopefully we can do this right."
MassLive has obtained thousands of pages of the Gaming Commission's emails from the week the story broke, following a public records request.
A review of the emails offers a glimpse into how the state's gaming regulators reacted to the growing controversy. And the emails show the commission was closely tracking how the Wynn scandal played out in the media.
Hours after commissioners met to discuss the allegations on Jan. 31, as well as face questions from reporters, Crosby forwarded one article to the Gaming Commission's chief investigator, Karen Wells, with the note, "I think we did pretty damn well in this one!"
The Gaming Commission withheld emails related to the agency's ongoing investigation into Wynn and privileged messages between commission staff and attorneys.
On Jan. 26, the Journal reported that Wynn had paid a $7.5 million settlement in 2005 after a manicurist at one of his casinos alleged that he pressured her into having sex against her will. Steve Wynn called the allegations "preposterous."
Dozens of other people who worked at Wynn's casinos told the Journal of a years-long pattern of sexual advances toward female employees, including exposing himself to and requesting sexual services from massage therapists who worked for his company.
The Massachusetts Gaming Commission quickly launched a review of whether Wynn's alleged conduct put the company in violation of regulations -- most notably, a requirement that gaming companies and their individual officers be found "suitable" for a gaming license.
Wynn and his company passed that review in 2013, but at a Jan. 31 public hearing the commission confirmed that the company had not disclosed the settlement to investigators at the time.
The commission's review is ongoing with no stated end date. Under Massachusetts' 2011 Massachusetts casino law, the Gaming Commission has the right to revoke or suspend the casino licenses for individuals and companies who violate regulations.
Wynn has denied any allegations of assault and claimed the accusations were instigated by his ex-wife Elaine Wynn, with whom he was embroiled in a shareholder dispute. The Las Vegas billionaire, who grew his initial casino investments in the 1960s into an international gaming empire, resigned as CEO of his namesake company on Feb. 6.
Shortly after the story broke Crosby asked outside experts for guidance.
"Needless to say, we are swamped in Mass with how to deal with the Wynn allegations. You got out at the right time!" wrote Crosby to former Nevada Gaming Control Board Chairman A.G. Burnett, who left his post in December. "If you were willing, I'd like very much to get some informal advice from you on this."
Crosby also received an email from corporate governance consultant Hal Shear, and responded by asking for background on how Wynn's board should handle the situation.
"Just what we needed. If his board deals with it, easy for us. If not, hmmm," Crosby wrote to Shear.
Shear also had sent Crosby an email containing a Bloomberg story from earlier that day, Jan. 28, headlined, "Harassment Claims Add to History of Issues With Wynn Board."
The Bloomberg article said the Wynn Resorts board has faced criticism for "weak corporate governance and deference to its founder and chairman." The article added, "Institutional Shareholder Services Inc., the proxy advisory firm, last year gave Wynn Resorts its worst ranking for governance risk. "
Shear's email to Crosby carried the following subject line: "too bad your guys didn't flag some of this."
"Not saying I would have used this to have negated the deal, but it shows pretty poor practices," Shear wrote.
In another email, Gaming Commissioner Lloyd Macdonald highlighted the outsize role Wynn plays in his company's projects, and the challenges facing the commission in its investigation.
"There is no silver bullet here. To state the obvious, what makes the stakes so high is that Wynn is the personal driving force of almost every decision relating to design, presentation and quality of the gaming operation and resort," Macdonald wrote to Crosby.
"But we must hold him accountable," added Macdonald, who was not on the commission when they selected Wynn in 2014. "Fortunately, at this time the most important thing is the facts, and our commitment to get to the bottom of them must be unambiguous."
Work on Wynn Boston Harbor has not stopped, and the casino is still scheduled to open in Everett, just outside of Boston, in June 2019.
MassLive reporter Gintautas Dumcius contributed to this report.
http://www.masslive.com/news/index.ssf/2018/02/there_is_no_silver_bullet_emai.htmlAmid Wynn investigation, people should 'sit tight and see what happens,' Massachusetts Gaming chairman says
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http://www.masslive.com/news/index.ssf/2018/02/amid_wynn_investigation_people.htmlHere's what Massachusetts investigators are looking into after Steve Wynn hit with allegations of sexual misconduct
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